Theories on the causes of the bond market rout ignore its global nature

Share via

There is ample evidence that a lack of market liquidity is amplifying sell-offs, as have happened in the past two years Neil Hall/Reuters

Last updated at 12:01AM, May 14 2015

No one knows for sure what caused the great bond market rout of the past few
weeks. More than $450 billion of value has been wiped out. German ten-year
government bonds, which in mid-April were yielding only 0.08 per cent, are
now yielding 0.64 per cent, having hit 0.73 per cent this week, unwinding
nearly all the gains made since the European Central Bank announced its
bond-buying programme in January.

Eurozone bond markets have given back nearly all the gains that they had made
since the start of the year while US, UK and Australian bonds have also been
caught